Container Ship Stocks are Sailing Higher

• Posted by Greg Harmon
• on March 24th, 2015

Whether it is because they are being used to store oil out at sea or move stuff around the globe, container ships are a hot topic. But they are also making for hot stocks. Last week Nordic American Tanker Shipping (a premium Top 10 pick) rose over 10% and it is still going. But this blog is not about what happened, rather about what could be. And there is another container ship stock ready to break out to the upside.

The chart of Danaos ($DAC) above tells the story. The area from 6.22 to 6.45 has been important as resistance since April last year. And now after making a low in October it is addressing that resistance for the 4th time, each for a higher low. That creates an ascending triangle pattern, which for technicians points to a move to 8.90 should the price move above it to the upside.

The momentum indicators are mixed currently. The RSI is bullish and rising, supporting a break higher. But the MACD is not as bullish. It has pulled back in a shallow arc and is starting to turn higher. If it should cross the trigger line then it too would be bullish. The Bollinger Bands® have squeezed, which is often a precursor to a move, so the timing may be right as well. Look for a break over 6.45 to ride the high seas in this stock.

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